Tag: mortgage

Right now, an unprecedented number of Americans have lost their jobs, lost a large portion of their income, or worse, and simply aren’t able to pay their bills. But what about you? What bills should you pay? And what bills should you skip?

Truthfully, if you have the money, you should pay ALL of your bills as usual for as long as you can. Don’t be one of those people who are still working, yet use the pandemic to skip a mortgage or car payment. Believe me, you will be sorry in the long run if you choose to go that route. We still don’t know what the fallout with respect to our credit reports (and credit scores) will be as none of the legislation that has been enacted either directly or indirectly addresses payments that are skipped during this unprecedented time. Already, we’re seeing lendors of all types, from home mortgage lenders to credit card providers, put stricter requirements in place to even qualify for a new loan, and/or cut back on credit limits, the types of loans available, and more. So, if you can pay your bills, do so.

However, if you cannot pay your bills, the most important thing that you should do is to sit down and see what your options are with each and every bill that you have. Does your mortgage provider have a forbearance option? If so, will that affect your credit report, and if so, how? What about your car loan? If there is no effect on your credit score, these may be your best options. If not, then look at your credit card bills. Many are offering some type of special payment arrangements, but again, ask what effect this will have on your credit score. Next, look at your local utility companies. Many states have passed legislation regarding utility services, so chances are, your local providers will not shut off service if those bills are late, so that may be a viable option if you are strapped for cash. The main thing is that you look at all of your options.

Whatever you do, don’t just stick your head in the sand. Communicate with each and every one of your creditors for any bills that will be late, even if it’s only a few days. Let them know when to expect payment. Request that late fees, if any, be waived. Request that they not report it to the credit bureaus. And, if they do, make sure that you add a statement to your credit file explaining why the payment was late. As hard as it may be to address these issues now, it will save you years and years of grief in the long run.

So you want to buy a house… you’ve decided that you can afford a mortgage, insurance, and the inevitable repair bills? And it’s better to be building equity of your own than paying someone else’s mortgage, insurance, and repair bills like you do when you pay rent, right?

But, do you really know what it takes to buy your first house? Have you really investigated anything other than looking at your “dream home” on the real estate websites? If you’re like most first time home buyers, the answer to that question is a resounding “NO.”

The truth is, there’s a lot more to buying a house than just looking at homes, then going to the bank and getting the loan. A. Lot. More. In fact, getting your first house may very well be the hardest thing that you will ever do financially… you’ll find yourself digging for bits and pieces of your credit history, check stubs, tax returns, and so much more, just to get approved for the loan. And you’ll need a lot more money than just the down payment that the bank asks for up front. Trust me, it can be a long drawn out process, and you’re never really, really sure that it’s all going to go through until the moment when you finally sign all of the paperwork and they hand you the keys to your new home. (And that, too, will happen eventually!)

So, what can you do up front, before you actually find the home, make the offer, and then go to the bank? Well, first and foremost, if you’re thinking about buying a home, you need to start with your credit score. If your credit score is below 600, you’re going to have a hard time finding a mortgage lender who is willing to work with you, and if you do, you’ll likely pay a higher interest rate than if you start out with a credit score in the mid 600’s.

Don’t know your credit score? Well, that’s the absolute first place to start anytime that you want any kind of credit, be it a mortgage loan, an auto loan, or even just a credit card.

Of course, there are lots of places where you can get your credit score for free these days, and most of them are really good, but sometimes to get your full credit report as often as you’ll want to while you’re in the process of buying a house, it’s better to pay for credit monitoring for a few months. That way, you can keep a really good eye on your score, and if your score isn’t where it needs to be, you can check it frequently while you work on cleaning up your credit to get ready to buy the house of your dreams.

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